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Indian businesses yesterday reiterated a demand for a separate economic zone for them to increase Indian investment in Bangladesh and narrow the bilateral trade gap that heavily favours India.

“We want a separate special economic zone to invest in and also to re-export to India,” said RV Kanoria, president of the Federation of Indian Chambers of Commerce and Industry (FICCI).

Kanoria spoke at a seminar on 'investment opportunities in Bangladesh' jointly organised by the trade bodies of the countries at Sonargaon Hotel in the capital.

An Indian delegation led by SR Rao, secretary to the Indian commerce ministry, is in Dhaka now.

The current balance of bilateral trade between the two countries heavily tilts towards India, as Bangladesh is a net importer of Indian food items, cotton, vehicles and other equipment.

Bangladesh imported goods worth around $5 billion in fiscal 2011-12 through formal channels, against exports of nearly $590 million, according to data from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

Kanoria urged the Bangladesh government to introduce a multi-purpose visa regime for Indian businesspeople.

Asking for removing non- and para-tariff barriers, he also called upon the governments of both the countries to improve infrastructure in the bordering areas.

SR Rao said the best value addition at the cheapest rates is possible only in Bangladesh.

“Bangladesh should not consider India as a competitor rather the country should extend its cooperation to India for future development of trade of both the countries,” Rao said.

Abdul Matlub Ahmad, president of India Bangladesh Chamber of Commerce and Industry, said Bangladesh has failed to fully utilise the trade benefit that arose out of the removal of duty by India on almost all products of Bangladesh.

This is because Bangladesh's export basket is not so rich, he said.

The largely untapped market of the Northeast India can also be an attractive destination for goods made by Indian investors in Bangladesh, said FBCCI President Kazi Akram Uddin Ahamed.

He said investment in Bangladesh is well protected by law, and sought Indian investment in textile, electronics, information technology, frozen food, leather, ceramic, light engineering and shipbuilding sectors.

Arif Ahmed, deputy director of Board of Investment in Bangladesh, said the actual Indian investment in Bangladesh was $25.74 million in 2011, down from $43.19 million a year ago.

The government is now working to develop seven special economic zones across the country for both the domestic and foreign investors.